Beyond TDP euphoria! Andhra-linked stocks that are worth buying for the long term

Analysts said is seen as a pro development politician, who believes in aggressive spending on building infrastructure for the newly formed state of Andhra Pradesh.

"This has got a double boost with TDP forming a state government in Andhra Pradesh and also getting into alliance with BJP in centre," said Atish Matlawala, Sr Analyst, SSJ Finance and Securities.

TDP-linked stocks

Heritage Foods, in which Naidu's son Nara Lokesh is a promoter, has led the rally as the company's shares jumped over 30% in the last five trading sessions.

Chief Minister-designate Chandrababu Naidu's family's total holding in the company stands at just over 35%. At one point, Naidu's family wealth swelled by over Rs 1,000 crore as the stock more than doubled in the last 12 trading sessions.

Heritage Foods is one of India's leading value-added and branded dairy products companies. It also has a presence in the cattle feed business through its subsidiary, Heritage Nutrivet Ltd (HNL).

Matlawala said investors can keep Heritage Foods on the radar and keep accumulating the stock on dips.

Meanwhile, Amara Raja Energy and Mobility, which is into the business of energy storage solutions and Lithium-ion cell manufacturing, has seen its shares jump over 20% in the last five days. Amara Raja's is led by Jay Dev Galla, who was a former MP from TDP.

Analysts said Amara Raja remains positive as it strategically positions itself for future growth by expanding its capacity and supporting the e-mobility sector with a diversified battery portfolio.

"The next major growth trigger for the company is if it can tie up with a large firm for technology tie-up in the Li-ion cell space, which could open up the PV Li-ion cell opportunity size of about 45GWh by FY30E. It appears well-prepared to navigate the evolving battery market dynamics while capitalizing on emerging opportunities in the e-mobility sector," said DK Mudaraddi, Research Analyst at StoxBox.

Infrastructure play

Companies like KNR Construction, KCP, Likhita Infra, , have significant stakes in Andhra Pradesh and as a result rode the euphoria of TDP victory at the bourses. While KCP jumped 33% in the last five trading sessions, KNR Construction rose about 20%.

NCC, one of the notable infra companies operating in Andhra, saw its shares rise by 22% in the five days post election results, Pitti Engineering rallied 15% in the same period.

"Infrastructure companies with a sizable orderbook coming from Andhra Pradesh must be on investors' radar for investment opportunities. NCC in our view is one such company," said Matlawala.

Cement companies which have exposure to Andhra Pradesh markets are also expected to see some revival as infrastructure spending gets a boost. Companies like and Sagar Cement will be in focus in the near term.

Shrimp Industry

Chandrababu Naidu played a significant role in shaping the Andhra Pradesh shrimp industry through various initiatives and policies during his previous tenure as Chief Minister.

Analysts expect the same from him this time as well bringing a revival of shrimp farming. Companies like Avanti Feeds and Apex Frozen Food should likely benefit from such policies. Shares of Avanti Feeds and Apex Frozen Food jumped nearly 20% in the last five days.

Pharma boost

Shares of Andhra-related and Aurobindo Pharma too joined the bandwagon of election outcome related waves, rising 17% and 5%, respectively in the last five days.

Analysts are positive on Aurobindo Pharma, which experienced robust revenue growth for the fourth quarter and fiscal year 2023 due to increased sales driven by new product launches, expansion into emerging markets, volume increases, and stable pricing.

The improved capacity utilization has led to higher operating efficiencies and profitability margins expanded due to a favourable product mix.

"As we advance, we expect the company's key areas to watch include the ramp-up of the Penicillin-G project in FY25 and the pipeline of 14 biosimilar products, poised to drive growth in the medium to long term," said Prathamesh Masdekar, Research Analyst at StoxBox.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)